Reason: it is asking the car industry to do much less than what it has already achieved!

Be ready for state-sponsored fuel guzzling when the country is already reeling under severe energy crisis

New Delhi, November 1, 2011: The new fuel consumption norms for cars, proposed recently by the Bureau of Energy Efficiency (BEE), are full of holes, says a review done by Centre for Science and Environment (CSE).

CSE’s criticism of the proposed norms is unsparing and scathing. Says Anumita Roychowdhury, CSE’s executive director-research and head of its air pollution and urban mobility team: “Our review exposes some unacceptable follies and raises serious questions about the intent of the standards.”

The CSE critique was presented by Roychowdhury at a public consultation held by BEE on the proposed ‘corporate average fuel consumption standards’ for cars here today.
What has the CSE review found?

The government has reduced standards to an absurd number game. It states the formula, but hides the standards and the data: What the BEE proposal gives is only a complex set of equations and a slope of a standard line. The people of the country are expected to figure out from this the corporate average fuel consumption standard for cars! But even that is not possible as the proposal does not share any data on sales, fuel consumption and weight of car models (needed to estimate the corporate average standards). Says Roychowdhury: “This makes a complete mockery of this official public consultation, ostensibly organised to solicit public comments on the proposal.”

CSE researchers point out that all international regulations take care to mention the actual limit value or standard in the regulatory document. For instance, the regulatory document of the European Commission (Regulation (EC) No 443/2009 of the European Parliament and the Council of 23 April 2009) states “This regulation sets the average CO2 emissions for new passenger cars at 130 gCO2/km…..” The Indian government has chosen to remain silent on the real target value.

No action roadmap -- proposed standard signals the car industry to slow down: CSE researchers have tried to clear the haze: they have estimated the proposed standard values from the available data on sales, fuel economy and weight of car models. As per these estimations, the proposed corporate average fuel consumption limit value for 2015-16 is 5.7 litre/100 km. For 2020-21, two limit values have been proposed – 5.1 litre/100 km assuming uniform Euro V-compliant fuel quality across the country or 5.4 litre/100 km without it.

According to Roychowdhury, it is shocking that these targets are far worse than the natural rate of improvement achieved by the car industry. The BEE consultation paper itself states that the actual average fuel consumption of cars has already reduced by 2.8 per cent a year since 2006-07 to reach 6 litre/100 km in 2009-10.

But compared to the 2009-10 level, the official proposal is asking for only 0.45 per cent per year reduction until 2015 and by 2.27 per cent thereafter. This is a mere 14.4 per cent reduction in fuel consumption between 2010 and 2020 -- a measly 1.28 per cent per year reduction over 10 years.

Clearly, the proposal is legitimising a slow-down. CSE researchers point out that the new standards have craftily allowed a fat margin for the car industry to increase average weight of the car fleet, and worsen energy guzzling. The new standards will not give the country any real fuel saving benefits.

Some major car makers will get away by doing almost nothing: The proposal is also silent on the specific targets for each manufacturer based on their unique product mix and the average target for the entire industry. But the limited data given out by BEE suggests that some of the major carmakers will not have to do anything until 2015. For instance, based on the 2009-10 performance Tata Motors and Hyundai are meeting the proposed standard of 2015-16. Only after 2015 does the limit value get a little tighter, especially for heavier vehicles, but it is still not stringent enough.

Moreover, in 2010-11, more car companies have come within the fold of meeting the 2015-16 standards; these include Maruti Udyog Ltd, among others. These companies account for over 70 per cent of the market,

To justify the lax targets and make the proposed standards look better in contrast, the government has created lenient ‘hypothetical’ standard lines for 2006-7 and 2009-10 as the average of worst performers in the market: For the years 2006-7 and 2009-10, the BEE consultation paper shows an average line of the worst performing manufacturers in the market. These have been treated as the base lines to contrast the average standard line proposed for 2015 and 2020. This gives an illusion that the standards are a lot better in contrast. But in reality, the actual improvement targeted over the 10 years is a mere 1.2 per cent. This completely defies logic and is scientifically untenable. Asks CSE: “Why is the government of India giving legitimacy to motivated misinformation?”

Clever ploy – government says tighter fuel economy standard is possible only if Euro V-compliant fuel quality is available nationwide: This is simply holding the country to ransom – technically, current fuel quality is not an impediment to improving fuel efficiency of cars. Even today, some of the highest selling car models in the Indian market including Alto, i10, i20, Verna, Spark etc have fuel economy levels better than both the two standards proposed for 2020. Euro V fuel is certainly needed to cut toxic and life-threatening emissions, but it is not conditional to improving fuel efficiency.

Compliance left to self calculation and self reporting by the industry: Compliance with the corporate average fuel economy consumption standards depends not only on testing fuel economy of each car model, but also on the weight and number of each car unit sold in a year. This requires an extremely credible and independent data reporting system to cross-check the self-reported data of the industry. But India does not have an official system to collate and verify the actual sales of car models in the country. Neither stringent penalty nor independent verification testing of cars have been prescribed.

Says Roychowdhury: “This is an unholy mix of strategies – keep the actual target values hidden and allow only self reporting by car companies to know if the standards are being met! This is not acceptable. The government must implement corporate average standards only with an independent official central registry database in the public domain.”

She adds: “CSE is extremely concerned that the standards have been decided based only on deliberations with the automobile industry which is the target of these standards. This is a serious conflict of interest. All emissions regulations for vehicles so far -- including the Auto Fuel Policy Roadmap -- have been decided by well represented bodies and committees and broad-based consultation processes with a range of stakeholders. We fail to understand why this process has been overlooked in this case.”

What CSE demands

Declare the actual official value of the standard to make the improvement targets transparent.

Significant tightening of the standards based on what the industry has already achieved: The new standards must aim for 2.5 per cent annual improvement until 2015 and subsequently achieve 3 per cent improvement a year. With this, it would be possible to have the standard of 4.4 litre/100 km or 104 gCO2/km in 2020. This is also in line with the proposal of the low carbon report of the Planning Commission and consistent with the stated goal of India to reduce the energy intensity of the economy by 20-25 per cent until 2020. Only this will help achieve effective fuel savings that is urgently needed as India imports nearly 80 per cent of its crude oil.

Create a central registry of data on fuel economy, weight and sales of each car sold in a year to make compliance and verification transparent and the standards enforceable.

Fuel economy labeling programme should also have a minimum standard for the lowest star one class.

Labelling should be revised every three years to reflect the improvement in the market.